F/EA obtains applicable employer account numbers with the Internal Revenue Service (IRS) and State Department of Revenue (DOR) on behalf of each active participant served by F/EA in the participant direction program. F/EA registers consumers with the State Department of Labor (DOL) for State Unemployment Insurance, but only after the participant has been determined liable for State Unemployment Insurance (See Register Consumer with State Department of Labor (Unemployment)).
Create Consumer Folder
The internal controls used by F/EA to monitor this process establish responsibility, segregate duties, document procedures and ensure independent internal verification.
Applying for an Employer Identification Number (EIN) from the IRS is the first step in registering the employer with tax agencies and authorizing the F/EA to file and pay taxes on the employer’s behalf. An Employer Identification Number is required on all other employer tax forms. As of 2013, the IRS now allows Fiscal/Employer Agents to apply for EINs online.
If applying for EIN online:
If applying for EIN via fax:
A participant is registered with the State Department of Revenue (DOR) to allow the participant to deposit and file state income taxes that are withheld from the participant’s workers(s). Registration with DOR occurs after obtaining an EIN on the participant employer's behalf.
Filing a completed Form 2678 with the IRS authorizes F/EA to withhold, file and pay employment and Federal Withholding taxes on behalf of the participant. Form 2678 is not effective until the IRS approves F/EA to act on behalf of the participant employer. This approval is submitted to the F/EA with Notice LTR-1997C.
Because Form 2678 is not effective until the IRS approves the F/EA as an agent of the employer and therefore F/EA does not have joint liability for federal employer taxes until the IRS approves the Form 2678, F/EA includes language in each participant contract stating that F/EA is liable per the participant contract for employer taxes even before the IRS approves Form 2678.
<<Insert address from IRS "Where to File" chart based on location of F/EA>>
Filing a completed Form 8821 with the IRS authorizes officers/staff of the F/EA to discuss employer tax matters on the participant’s behalf with the IRS. 8821 Appointee status does not authorize F/EA officers to represent the participant for the IRS. Note that an executed Form 8821 is no longer required by the IRS for Fiscal/Employer Agent services, but it is a best practice to obtain executed Forms 8821 and file them with the IRS.
3. Mail Forms 8821, list of officers and 8821 Letter to:
4. <<Staff Title>> opens forms tracking module in Payroll System
5. The IRS does not notify of 8821 approval